Is It a Fruit or a Vegetable?

August 12, 2014
By: Chin Kim

My 10-year-old daughter asked me a question the other day, and I was totally stumped. The question was: “Is an avocado a fruit or a vegetable?”

For those of you who may be uncertain, I was told that it is a fruit. Along the same lines, we finally received some closure relating to whether an inherited IRA is exempt or not exempt from bankruptcy protection.

On June 12, 2014, the Supreme Court unanimously ruled (in Clark v. Rameker) that inherited IRAs do not qualify as retirement assets and are not exempt from a debtor’s bankruptcy estate. The court’s conclusion that an inherited IRA should not be considered “retirement funds” was based on the three main legal characteristics:

  1. The holder cannot make additional contributions (i.e., cannot fund annual IRA contributions).
  2. The holder must take minimum distributions from the account (i.e., the beneficiary of an inherited IRA must take annual distributions over life expectancy).
  3. The holder can take withdrawals without the 10% penalty tax (i.e., there is an exception for death payouts to an IRA beneficiary).

For those of you who may want to know my excuse for not knowing that an avocado is a fruit, I told my daughter: “When daddy grew up in Hong Kong, nobody ate avocados.”

Should you have additional questions regarding this topic, please feel free to contact the Advanced Marketing Group at 800-722-2333, x3939, or send an e-mail to



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Chin is currently an Assistant Vice President of Regulatory Compliance in the Retirement Solutions Division at Pacific Life. Previously, he led the Retirement Strategies Group, as Assistant Vice President in the Retirement Solutions Division at Pacific Life. His core responsibilities included sharing and supporting retirement strategies concepts through development of marketing materials and tools and leading the team members in the field and in the home office.

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